POLL - Should NI avoidance on pension contributions, via Salary Sacrifice, be stopped

MattMattMattUK

Should be left alone

GunJack said:

Whilst I'm all for simplicity, that would appear to be TOO simplistic...

Why? Very similar to the current position where one qualifies by reaching the NI threshold, all that would be changed would be qualification by reaching the "paid enough tax threshold".

GunJack

Should be left alone

And what about those who don't earn enough to pay (but under current rules qualify for NI credits)?

MattMattMattUK

Should be left alone

GunJack said:

And what about those who don't earn enough to pay (but under current rules qualify for NI credits)?

The government of the day could choose to either give them a free pass, as they currently do with NI credits, or not.

uss_hamish

Should be left alone

If NI were actually meaningfully different from tax in terms of what it paid for, I think there might be an argument for ensuring sal sac didn't get people out of it (even while it postpones other tax till retirement), but as it isn't, I think it would be better to avoid adding any further complications around it, and move towards combining it with income tax for a simpler system.

Mutton_Geoff

I remember Gordon Brown doubled the employee rate and removed the CAP making it just another form of income tax. With decent earnings putting me in the high rate bracket, I put a lot into my pension by sal sac to avoid paying up to 62% tax on my income.

The 1% capped rate meant roughly £2k a year NI, after Gordon Brown's adjustment, I was paying around £6k a year. My career NI contributions cover at least 10 years of state pension. Let's hope I live that long!

The net effect of a decent pension is that I'm also paying 40% tax on some of that income.

squirrelpie

Wrong question. NI should be abolished (i.e. merged into income tax) with appropriate surrounding rule changes.

Hoenir

Simplification of the tax system is long overdue. 

Baldytyke88

MK62 said:

I suppose another point of interest would be whether those voting for "Should be left alone" are using salary sacrifice for their pension contributions (given that few people vote to make themselves worse off).......and whether those voting for "Should be stopped" are in the opposite camp.......

But are most of those who benefit from SS earning more than £20k?

I have £37k in a SIPP all put in over the last 10 years, if I could SS I would do so. SS is just a way of avoiding tax, so it's unfair for those who cannot do it.

What is the point of a tax rate if you allow people to avoid it?

Roger175

Should be stopped

Baldytyke88 said:

But are most of those who benefit from SS earning more than £20k?

I have £37k in a SIPP all put in over the last 10 years, if I could SS I would do so. SS is just a way of avoiding tax, so it's unfair for those who cannot do it.

What is the point of a tax rate if you allow people to avoid it?

Totally nailed it! I have never had the opportunity to SS one penny of my SIPP contributions - the whole concept is totally random and unjust. Either the country (UK PLC) needs tax revenue or it doesn't. SS is just legal tax evasion.

westv

Should be left alone

Roger175 said:

Baldytyke88 said:

But are most of those who benefit from SS earning more than £20k?

I have £37k in a SIPP all put in over the last 10 years, if I could SS I would do so. SS is just a way of avoiding tax, so it's unfair for those who cannot do it.

What is the point of a tax rate if you allow people to avoid it?

Totally nailed it! I have never had the opportunity to SS one penny of my SIPP contributions - the whole concept is totally random and unjust. Either the country (UK PLC) needs tax revenue or it doesn't. SS is just legal tax evasion.

Ah, so your employer doesnt/didn't bother to offer it so you think nobody else should have it?